Government ‘must act to protect firms from insolvency’

Posted 08/12/2009

A private sector business group has urged the government to provide support for companies in order to protect them from falling into insolvency.

Private Sector Partners (PSP) North West told Crain’s Manchester Business that Alistair Darling must make “difficult decisions” over tax breaks and financial incentives in his upcoming Pre-Budget Report.

Len Collinson, leader of PSP, said that such measures were necessary due to the fact that 130,000 businesses across the UK are currently at risk of insolvency.

He therefore suggested that initiatives such as a delay to the VAT rise, the introduction of automatic business rate relief and the scrapping of planned corporation tax increases will help to prevent this.

Mr Collinson added: “This Pre-Budget Report cannot and must not be an underwhelming fudge … we need bold, dynamic and tough leadership.”

Last month, insolvency trade body R3 predicted a “bloodbath” among high street retailers during a difficult New Year period which will see a number of high-profile chains disappear.